Sovereign Risk and the 'Macroprudential' Illusion

5 Pages Posted: 1 Dec 2014  

Richard Christopher Whalen

Economic Advisory Committee of FINRA; Indiana State University - Networks Financial Institute; Association of Private Enterprise Education (APEE); National Association of Business Economists (NABE)

Date Written: November 17, 2014

Abstract

Looking back at 2014, capital requirements for banks have increased, liquidity rules have been promulgated, but all without any real focus on the twin causes of the 2008 crisis – namely securities fraud and inadequate disclosure of off balance-sheet leverage. Regulators have even coined the term “macroprudential” to describe a method of managing both markets and whole economies, as though top down management of democratic, free-market societies were actually possible. Seen from another perspective, 2014 was also the year in which public sector debt continued to increase. Governments from Washington to London and Tokyo steadfastly pretend that the accumulation of public and private debt, and related monetary expansion, is not a problem. At the same time, global regulators and their political sponsors in the major industrial nations steadfastly refuse to tackle the difficult problem of eliminating debt that is demonstrably uncollectible.

Keywords: Macroprudential, sovereign debt, debt reduction, Bank of Japan, ECB, Fed

JEL Classification: E01, E04, E05, E06, B02

Suggested Citation

Whalen, Richard Christopher, Sovereign Risk and the 'Macroprudential' Illusion (November 17, 2014). Available at SSRN: https://ssrn.com/abstract=2479699 or http://dx.doi.org/10.2139/ssrn.2479699

Richard Christopher Whalen (Contact Author)

Economic Advisory Committee of FINRA ( email )

1735 K Street NW
Washington, DC 20006
United States

HOME PAGE: http://tinyurl.com/2bne6p

Indiana State University - Networks Financial Institute ( email )

Terre Haute, IN 47809
United States

HOME PAGE: http://tinyurl.com/4ckcoxo

Association of Private Enterprise Education (APEE) ( email )

313 Fletcher Hall, Dept. 6106
615 McCallie Avenue
Chattanooga, TN 37403-2598
United States

HOME PAGE: http://https://www.apee.org/

National Association of Business Economists (NABE) ( email )

1920 L St. NW, Suite 300
Washington, DC 20036
United States

HOME PAGE: http://www.nabe.com

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